New car prices vary considerably across the EU, with the UK being dearest for most cars, Ireland ranking in the middle, and Denmark cheapest.
In theory, this should mean there are bargains for Irish people willing to shop abroad.
For instance, the latest EU Commission's new car price survey shows tax-free prices for the Fiat Punto of £5,285 in Ireland, £7,376 in the UK and £4,157 in Denmark. The Nissan Almera costs £9,028 in Ireland, £6,946 in Denmark and £11,950 in the UK. And the Toyota Yaris costs £9,126 in the UK, is second dearest in Ireland at £8,067 and cheapest in Denmark at £5,875.
The results of the bi-annual survey, carried out on November 1st, 2000, were posted this week on the EU Commission's Europa website. The "huge price differentials" cannot be explained by currency fluctuations, purchasing power or tax, according to the European consumer organisation, le Bureau Europeen des Unions de Consummateurs (BEUC).
"These prices are pre-tax prices, which are set by the manufacturers themselves. To be able to choose such large price differences the manufacturers must be very confident that few of their cars will be traded cross-border," stated BEUC.
The European Consumer Centre in Dublin said car dealers and manufacturers enjoyed a monopoly on distribution due to block exemption of motor vehicle distribution and service agreements, under EU regulation 1475/95. This exemption states that distribution must be tied in with the manufacturer.
"According to Competition Commissioner Mario Monti, distribution through this exclusive and selective dealership system (whereby cars are transported from the factory via an importer/dealer to the consumer) accounts for 30 per cent of the cost of a new car," said the ECC.
This block exemption is due to expire at the end of September and the Directorate General for Competition is evaluating the regulation. If the exemption is not renewed, it could lead the way to lower new car prices and even out prices between member-countries.
The ECC said "this may or may not be good news, as the Irish still have to pay VAT at 20 per cent on a new vehicle. Vehicle registration tax is also levied at a rate of 22 to 30 per cent".
VAT is levied on the invoice price paid in the country of purchase but VRT is levied as well on the open market selling price in Ireland.
For further advice on buying a car in the EU, contact the European Consumer Centre at 01 809 0600 or www.ecic.ie